Question
( Operating leverage ) The Quarles Distributing Company manufactures an assortment of cold air intake systems forhigh-performance engines. The average selling price for the various
(Operating leverage) The Quarles Distributing Company manufactures an assortment of cold air intake systems forhigh-performance engines. The average selling price for the various units is $600
600. The associated variable cost is $450
450 per unit. Fixed costs for the firm average $ 200 comma 000
$200,000 annually.
a. What is thebreak-even point in units for thecompany?
b. What is the dollar sales volume the firm must achieve to reach thebreak-even point?
c. What is the degree of operating leverage for a production and sales level of 5 comma 000
5,000 units for thefirm? (Calculate to three decimalplaces.)
d. What will be the projected effect on earnings before interest and taxes if thefirm's sales level should increase by 20
20 percent from the volume noted in part (c)?
a. What is thebreak-even point in units for thecompany?
nothing
units(Round to the nearest wholenumber.)
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